RBI Not Banned Cryptocurrency But Issued New Rules

RBI Not Banned Cryptocurrency But Issued New Rules

India’s central bank deputy governor BP kanungo on behalf of RBI directed the banks and financial institutions it oversees not to work with cryptocurrency exchanges and other related services.

In more simple words, the central banking body of India restricted all major banks of India to deal with cryptocurrency and prevented any individual to deal with it.The time limit specified for it is three months.

Rapid changes in the landscape of the payments industry along with factors such as emergence of private digital tokens and the rising costs of managing fiat paper/metallic money have led central banks around the world to explore the option of introducing fiat digital currencies. While many central banks are still engaged in the debate, an inter-departmental group has been constituted by the Reserve Bank to study and provide guidance on the desirability and feasibility to introduce a central bank digital currency. The Report will be submitted by end-June 2018.

However, the news went viral that India banned crypto market. As it is justifiable from immense price slump in Indian exchanges.But we all know that the outcome of the blockchain committee headed by Ajeet Khurana is yet to come.

On the positive side, the news also flashed that the Central bank of India is also going to use blockchain technology in terms of digital rupee.An inter-departmental group will study on implementing the revolutionary technology.”

Why RBI doing this?

Since there are too many scams and money laundering cases coming up day to day. They just want to take some initiative in order to save the future FUDs.

Though RBI mentioned that the virtual currency has potential to enhance the financial system but also raise the concern of illegal entity too.

Its duty of government to protect innocent citizens who fall in these frauds. Making these decisions are will liquified and stop many frauds.

Further RBI Website Mentioned:

Technological innovations, including those underlying virtual currencies, have the potential to improve the efficiency and inclusiveness of the financial system. However, Virtual Currencies (VCs), also variously referred to as cryptocurrencies and crypto assets, raise concerns of consumer protection, market integrity and money laundering, among others.

Reserve Bank has repeatedly cautioned users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated in dealing with such virtual currencies. In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time. A circular in this regard is being issued separately.

There is no ban on bitcoin or any other cryptocurrency so there is no need to panic.It is just the RBI’s step to be cautious about people money as it has already issued three warnings regarding risks in crypto before.

Even in G20 meeting, India came out to be the neutral one. India cannot stand apart from rest of world in terms of technology.

So don’t worry if the 20th century was of banks and stock market 21th century will be definitely of blockchain technology.